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Show The Salt Lake Tribune BUSINESS D13 Friday, November 22, 2002 Real-Estate Trusts Praise Passageof Terror InsuranceBill Companies have found it difficult to get coverage BY JANET MORRISSEY DOW JONES NEWS SERVICES NEW YORK A number of realestate investment trusts stand to be the big winners following the Senate's passage of terrorism insurance legislation. Many had been facing skyrocketing insurance premiums on some of their properties. In some cases, NO coverage was available at all as skittish in- insurance. Ed Linde, president and the next terrorism Properties Inc., Brookfield Properties Corp., Equity Office Properties Trust, Vornado Realty and Simon Property Group Inc. are among the names expected to benefit most from the legislation once the presidentsigns it into law next week, ding to Merrill Lynch analyst Steve Sakwa. ‘The five REITsall own highprofile properties in major markets. And most have been struggling to find affordable and available —_terrorism portfolio. Some lenders had result, Boston Properties was started to get squeamish about among those that opted to selfinsure muchof its portfolio for “a very positive step.” However, he said “the real terrorism coverage. question now is if insurance companies act responsibly tient” waiting for the legisla- with respect to pricing of in surance to cover terrorism issues.” Indeed, Boston Properties has been among a number of REITs findingit difficult to find affordable and available terrorism insurance. Earlier this year, Linde indicated that his company could get only $150 million in terror. ism insurance coverage, and that would have to cover the company’s entire portfolio, “We've all been very pa- financing or even refinancing an individual property especially a high-profile trophy property in a major market if that asset wasn't covered by tion, said Linde. “It is a very positive development,” concurred Sam Zell, chairman of Equity Office Properties. “It should stabilize and normalize the ability of all terrorism insurance. Even Moody's Investors Service and Fitch Ratings last month downgraded billions of dollars in single-asset CMBS, citing terrorism rorism insurance.” Zell said the cost and avail ability of insurance coverage new development, causing real-estate activityto grindtoa halt. has been “grossly inadequate” over the past year. He said he knew of people who opted notto bid on properties out of concerns that financing, without terrorism insurance, would be Following the Sept. 11 ter. rorist attacks, insurance com panies warned that they may mortgages, rates increased to 4.14 percent this week, compared with 4,09 percent last week. This week's mortgage rates do not include addon fees Known as Thecoalition said the legislation will “create a temporary backstop that will encourage insurance companies to oifer (NAREIT) waspart of a coali tion of 66 real-estate, transportation, entertainment andcon: struction groups that lobbied hi for government legislation. We were gratified comprehensive, affordable ter rorism risk insurance to cover people andproperty.” and The Salt LakeTribsfpe ght Doyouhave a favorite spotto e vcrink ean Briga e your homeor in your town? We would view holiday lights” Is there an liketo hear about it! week of December. To be a part of thefun, fill out the coupon below or coverage would be about $4.5 commercial-mortgage-backed million which is more than half the amount the company already pays for property and casualty insurance for its securities markets. In a secured financing deal, the loanis backedby a particular property rather than a company’s entire skyrocket. In somecases, biological and chemical attacks have been excluded. Francisco's Embarcadero Center. Andthecost of this limited Indeed,the lack of terrorism insurance had begun to take a toll on the secured-lending and A list of displays will be published in The Salt Lake Tribune the second enter online at www.sltrib.com/ights. Photos are welcome. Mail coupons to: The Salt Lake Tribune Hilary Groutage Smith POBox 867 Salt Lake City, UT 84110 Geadline fer entries is Bes. 5. On Tuesday, the Senate passedlegislation that calls for ¢ Salt Lake ‘Tribune Light Bi Noe da : Address: Phone : City —___ = Decoration Description: FORSALE OR LEASE $1,800,000 or $16 ,000 per mo. Total “47,000 sq ft *2,500 sqft office space “Solid enclosed fence 10,000 sq. ft. dock about where the economy is heading. survey. tion, said Steven Wechsler, president and chief executive of NAREIT. not be able tooffer terrorism WASHINGTON Mortgage rates around the country edged up this week as investors tried to decipher mixed economic reports and other information Last week's rate of 5.94 percent was the lowest since the mortgage giant began tracking 30-year mortgage rates in 1971. It also had marked the seventh timethis year that rates on this benchmark mortgage hit a new low, Rates for 15-year fixed-rate mortgages, a popularoption for refinancing, also rose this week,climbing to 5.44 percent. Last week's rate on 15-year mortgagesfell to 5.32 percent, the lowest level since Freddie Mac began tracking these rates in 1991. Low mortgage rates this year have been feeding a refinancing boom, The extra monthly cash consumers are saving by refinancing their mortgages at lower interest rates is helping to support consumer spending, which has been the main force keeping the economy going this year. Stoked by low mortgage rates, home sales are expected to post records this year, For one-year adjustable-rate losses after y a deductible. The National Association of Real Estate Investment Trusts coverage without some kind of government backing. Or, if they did, coverage would be limited and premiums would Mortgage Rates for Week Edge UpSlightly ‘The average interest rate on 30-year fixed-rate mortgages movedupto 6.08 percentfor the week ending Nov. 22, after dropping to a new low the week before, Freddie Mac reported Thursday in its nationwide thankful” after learning the Senate had passed the legisla. su insurance concerns. If this continued,it could limit a property owner's ability to finance a property or owners to get appropriate ter- the government to pay 90 per- challenging. which includes multibillion surers worried that certain dollar properties such as San trophy properties could become entire $6 billion portfolio. As a chief executive of Boston Properties, views the legislation as Brought to you by deseretnews.com and sltrib.com Winter Attractions “located on 5 acres *7 yrs. 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